Large number of landlords exiting property market

By Ted Healy of DNG TED HEALY

Alarming new figures have highlighted the growing number of landlords who have exited the market in recent times. More landlords than ever are putting their properties up for sale, evicting tenants and driving a rise in family homelessness, new figures suggest.

There was a sharp increase throughout last year in the number of ‘Notice to Quit’ issued to tenants, according to the Residential Tenancies Board (RTB), rising from 352 in the first quarter of the year to 958 in the final quarter.

Over half of all such notices were given because the landlord decided to sell the property. Over 600 landlords told tenants to move out because they were putting the property up for sale in the last three months of last year.

Many tenants have difficulty securing new places to live, with some requiring emergency accommodation.

Other reasons given – accounting for almost a quarter of all the ‘Notice to Quit’ – included that the landlord or a family member intended to use the property themselves. A “breach of tenant obligations” accounted for just 14 percent of the ‘Notice to Quit’.

The figures from the RTB suggest 80 landlords a week exited the market in the last three months of 2021.
These are alarming figures indeed which show a large number of landlords looking to exit the market.
The property market crash of the late 2000’s saw Ireland create a large number of ‘accidental landlords’. Improved market conditions in recent times have seen people climb up out of negative equity enabling them to exit the market.

The majority of these properties are being purchased for family homes which in itself is a good thing, but the flip side is a declining number of residential rental properties in the market. At the time of writing there are only five properties listed as available to rent in Killarney; four of which are two bedroom apartments.

So what is the answer?

Incentivise landlords with tax breaks on rental income? Rental income is currently classed as general income incurring full income tax liability. Throw in stricter rent controls and compliance costs and is it little wonder people are exiting the market?

‘Good’ landlords who may not have increased their rent or perhaps reduced their rent over the pandemic period are now, in practice, being penalised with rent controls allowing for nominal increases. They are not allowed to now charge market rent for the property! While the theory of these rent controls makes sense and is certainly required, should a practical common sense approach also be taken in specific cases?

Should Local Authorities be allowed to buy any properties with HAP (Housing Assistance Payment) or RAS (Rental Accommodation Scheme) tenants in place, effectively becoming the landlord?

One thing is for sure, a plan needs to be put in place to slow down the disorderly exit of accidental and semi-professional landlords from the market or the already squeezed rental market faces further difficulties.